The authors document that homeownership of households with "heads" aged 25 to 44 years fell substantially between 1980 and 2000 and recovered only partially

during the 2001-05 housing boom. The 1980-2000 decline in young homeownership occurred as improvements in mortgage opportunities made it easier to purchase a home. This paper uses an equilibrium life-cycle model calibrated to micro and macro evidence to understand why young homeownership fell over a period when it became easier to own a home. Our findings indicate that a trend toward marrying later and the increase in household earnings risk that occurred after 1980 account for 3/5 to 4/5 of the decline in young homeownership.